* Obama works to improve ties with business community
* Critics say GE hurt workers by outsourcing jobs
* Immelt says public, private sector share responsibility (Updates with Obama remarks, previous WASHINGTON)
By Steve Holland
SCHENECTADY, N.Y., Jan 21 (Reuters) - U.S. President Barack Obama, in another shift toward the political center, named General Electric Co. (GE.N) Chief Executive Jeffrey Immelt on Friday as a top outside economic adviser to help lift hiring.
“I am so proud and pleased that Jeff has agreed to chair this panel, my council on jobs and competitiveness, because we think GE has something to teach businesses all across America,” Obama told workers at a GE plant as he announced the pick.
The appointment was welcomed by the U.S. Chamber of Commerce, with which Obama is trying to thaw relations that chilled over his healthcare and financial regulatory reforms. But manufacturers who blame GE for outsourcing U.S. jobs criticized the choice.
The “President’s Council on Jobs and Competitiveness” replaces an economic recovery advisory panel led by former Federal Reserve Chairman Paul Volcker, who is stepping down when his group dissolves next month.
“It’s a great thing that the economy is growing but it’s not growing fast enough yet to make up for the damage that was done by the recession,” Obama said. “The next two years, our job now is to put our economy into overdrive.”
Senate Republican leader Mitch McConnell said he hoped the new panel would remind Obama of other steps the United States could take to aid the economy, citing the need to increase free trade and avoid smothering business through regulation.
Bringing Immelt, a lifelong Republican, onto Obama’s team is the latest sign the that president is serious about building better ties with business.
Obama, a Democrat, recently named JPMorgan Chase executive William Daley to be his chief of staff, drawing praise from the corporate world. [ID:nN06123566]
The president promised to rejuvenate relations with business in the aftermath of last year’s congressional elections, which gave Republicans a majority in the U.S. House of Representatives and greater strength in the Senate.
The Chamber of Commerce, which fought Obama’s reforms, called the appointment “a promising step toward a renewed focus on creating jobs, boosting economic growth, and enhancing America’s global competitiveness.”
Immelt, 54, a member of the board of the New York Federal Reserve Bank, has been a frequent visitor to the White House and attended a CEOs meeting with Obama and visiting Chinese President Hu Jintao on Wednesday. [ID:nN19252678]
The news was not welcomed in all quarters. The Alliance for American Manufacturing complained that the firm had hurt U.S. workers through outsourcing jobs abroad.
“There is no swifter way to alienate working-class voters than to name an outsourcing CEO to lead your jobs strategy,” said AAM Executive Director Scott Paul.
GE, the world’s largest maker of jet engines and electric turbines, laid off 19,000 workers globally in 2009, or about 6 percent of the workforce. But it plans to add some 6,000 U.S. manufacturing jobs by 2014. [ID:nN21199037]
Immelt also served on the Volcker-chaired panel. He wrote in an opinion piece published on The Washington Post website that businesses shared a responsibility to boost the economy.
“There is always a healthy tension between the public and private sectors. However, we all share a responsibility to drive national competitiveness, particularly during economic unrest. This is one of those times,” he wrote.
The panel will work to promote growth by training workers to compete globally and to attract good jobs and businesses to the United States, the White House said.
Immelt said in his opinion piece the group would focus on expanding the U.S. manufacturing base, boosting exports, and increasing innovation.
The GE chief told Reuters Insider this week the United States and the enormous buying power of U.S. consumers would not be enough to drive earnings growth for big U.S. businesses in the decades ahead.
That context will inform the new panel, which is meant to pick up where Volcker’s group left off, focusing on growth after the last two years were spent pulling the United States out of the biggest recession since the 1930s.
“We still have a long way to go, and my number one priority is to ensure we are doing everything we can to get the American people back to work,” Obama said.
The president thanked Volcker and said he would continue to rely on him for advice.
The former central banker was the driving force behind the “Volcker Rule,” a provision in last year’s financial reform bill that puts limits on proprietary trading by U.S. banks.
Many on Wall Street vigorously fought the Volcker Rule and some sought to portray Volcker as out of touch with the modern financial system. But he has also received credit for reining in financial industry excesses that helped prompt the global economic crisis. (Additional reporting by Jeff Mason, Caren Bohan, Alister Bull, Patricia Zengerle and Matt Spetalnick)